Edit This Favorite

Next Concept HR Magazine focused on What's Next for what matters most to HR. Insightful and timely, it covers best practice trends and presents new ideas and concepts to keep readers up-to-date with the latest in our field. Voices from our nationwide community contribute to a wide range of topics. Articles include valuable practice resources, news and views to provide training, legal and legislative developments, info on quality service providers, and opportunities to form career-long networks and partnerships. Subscribe at: http://nextconcepthrmagazine.com/blog/

Though just 1-2% of companies offer unlimited paid time off (PTO), it has quickly become one of the most popular benefits in the modern workplace, with companies like Netflix, LinkedIn, and General Electric getting lots of buzz around their unlimited policies. However, employees dazzled by its promise might not know the more employer-centric origin of unlimited PTO plans.

In states where accrued vacation days are required to be paid out, it creates a gray area in terms of defining how many days have indeed been “accrued” when PTO is unlimited.

Even as more companies adopt unlimited vacation policies, it turns out that there is little effect on actual vacation days used: at companies with unlimited plans, employees on average only take about one more day off per year than companies with limited plans. Depending on how an unlimited PTO policy is put into practice, it often benefits employers more than the employees who seem to be its biggest proponents.

So why are employees so excited by the idea of unlimited vacation? With the right practice in place, unlimited vacation can remove stress around accruing time off, using up days before the end of the year, or trying to fit personal time into a rigid “X days a year” framework. Unlimited vacation can also boost company morale and productivity by trusting employees with the responsibility of managing their own time. 84% of managers agree that workers show increased focus and creativity after taking time off.

While unlimited PTO can come with pros and cons for both employers and employees, there is a strategic way to maximize the benefits of an unlimited policy for everyone. Here are some best practices for a successful unlimited time off policy:

Understand Your Motives

While unlimited PTO can benefit an employer in several ways, it’s most effective when the employee’s best interest is put front-and-center. Companies that have successfully implemented unlimited vacation policies are those who genuinely want to see employees take meaningful time off. Encouraging a healthier work-life balance will benefit both parties by increasing employee morale and productivity.

Companies that encourage hard-working employees to take the time off that they deserve will also increase employee loyalty and retention. Trusting employees with the responsibility to build their own time-off schedule nurtures a culture of trust, goodwill, and mutual respect. A company that shows a genuine interest in employee well-being and happiness motivates these employees to work harder.

Inspire Employees’ Work Ethic

Though some employers fear that employees will take advantage of unlimited time off, it is more often the case that employees about the same amount of time than they would if they had a set number of vacation days.

Unlimited vacation is increasingly common among tech startup companies. Startups, widely known for long hours and skipped lunch breaks, often facilitate a company culture that rewards employees for being the first one in and last to leave. In these naturally competitive work environments, employees feel compelled to compete with their peers for hours clocked.

Employees work hardest when they care about a company that cares for them. Working long hours for the sake of proving value is not sustainable and doesn’t contribute to productivity. To avoid this pitfall, success within a company should be clearly defined by quality of work, rather than face time.

Managers and leadership teams should establish concrete goals and an open line of feedback with their reports. Measuring employee value in terms of accomplishments, rather than time spent in the office, can contribute to a culture where employees feel like they deserve and can enjoy their time off. With this mindset, employees and managers alike can encourage healthy work-life balance practices.

Eliminate Ambiguity

Company culture can help shape the boundaries of unlimited PTO, but the specifics of these boundaries are often ambiguous. Employees frequently fall into a trap of taking less vacation than they deserve because they don’t know where to draw the line between acceptable and excessive. An open dialogue about expectations and needs between employer and employee can create more transparency around unlimited vacation.

Including guidelines for the policy in your company handbook (like setting a cap on consecutive days out of office, for example) gives employees a better sense of where to draw the line. Several companies have also customized their unlimited vacation policies to encourage employees to actually use their days, such as mandated vacation, travel stipends, and even a monthly vacation raffle. Early on, managers should establish best practices and work closely with employees to make sure they feel comfortable requesting time off.

--

Unlimited PTO works best when employers and employees keep each other in mind. This establishes a company culture that encourages both good work ethic and employee well-being. Employees shouldn’t feel like they’re sacrificing their personal life and employers shouldn’t feel like they’re being taken advantage of. The most common pitfalls occur when there’s an imbalance or tradeoff.

If a company upholds values around employee happiness, well-being, and appreciation as a motivator for high quality work, employees will in turn value the mission and success of the company. A successful unlimited vacation policy contributes to a culture of mutual respect, which can boost both productivity and employee wellness in the long run.

About the Author
Rachel Fenton is a Content Marketing Specialist at Namely, the all-in-one HR, payroll, and benefits platform built for today’s employees. Namely is a sponsor of the NCHRA HR TechXpo - August 17, 2017 in San Francisco.

Time off is a busy HR intersection where personal lives cross paths with business productivity, and trust in your company culture must be the guiding traffic light. Is it any wonder so many employees and companies end up stalled? A new survey released by Namely may reveal the true conflict: Employees want to take time off, but they’re simply not doing it.

Vacation, All I Ever Wanted

Our recent survey of 471 employed adults in the U.S. revealed that paid time off is the most important employee benefit for several employees. 1 in 5 are willing to give up a higher salary for more PTO or an unlimited policy. Furthermore, 87% of employees rated PTO policies a high priority when evaluating a new job’s benefits and compensation package—with over half calling PTO “very critical.” And just how much time off do people plan on taking? Over half of employees plan on 15 days or more of paid time off this year, with 20% planning on taking more than 20 days.

So, what’s the kicker of it all? Those carefree summer days and summer nights just aren’t coming to fruition.

The average American only took 11 vacation days in 2015 according to another recent survey. That’s a full 4 to 9 planned days that are going unused by employees—and sometimes more. According to Namely’s survey, over half of employees claim they typically book a week or more of time off in advance. But in reality, the average duration of a time off request is just 2.34 days according to data collected from the Namely platform.

It’s no secret that America comes in last among advanced economies in terms of mandated vacation days, with several American workers charting up their weekly hours worked like badges of honor. But what does it say when there’s a very real, collective misconception of the time that employees plan on taking—time that 57% of employees answered they would use for spending time with family—that they don’t really take? Is it a simple failure of wishful thinking? Or should we point the blame in the other direction—back on HR and the company itself?

I’ve Got the Power

We asked Matt Straz, Founder and CEO of Namely, to weigh-in on the trend. “What this tells us is that despite the best intentions to take large chunks of time away from work and unplug from technology, employees are feeling confined and are using vacation time differently than previous generations,” he said. “The result is shorter, more frequent bursts of vacation time requested last minute, which means it’s even more critical for today’s employees and HR departments to effectively communicate to mitigate any business impact.”

The biggest preventer of PTO, according to Namely’s recent survey, comes as no surprise: rigid company policies (26%). That is followed in close second by “stress at the thought of missing time at work” (21%). Both of those issues fall squarely in HR’s camp—policy and culture.

There’s no right answer to just how much PTO is appropriate for today’s working professional. Any thought leader will throw out any number of days, and the answer will vary greatly from employee to employee, as Namely’s survey recently ratified. But what organizations can do is empower their people. They can remove the barriers that stop employees from taking the time off that they do plan to take—the time off they need to stay happy and engaged. HR can truly create a better managed, more human workplace where employees are at the very least empowered to work in the very way they see fit. Here’s how.

1. Codify your culture’s expectations around time off and share them in an understandable way with people managers and employees.

According to data from the Namely platform, employees on “unlimited” time off plans only average one more vacation day per year than those employees on “limited” plans. That means HR and managers need to be clear about the time off they expect employees to take annually—no matter what kind of plan is in place. And employees take cues from their managers. For instance, 53 percent of managers surveyed by Project: Time Off admit they set a bad example for using time off for employees.

It’s HR’s responsibility to sit down and review or update vacation policies. Send an updated version of the employee handbook to employees, or schedule a lunch and learn for sections of the company to learn about new changes. Don’t forget to update career web pages and job boards with the changes so candidates are familiar with time off policies before they’re in the door. Put the information in many different forms and many different places so employees can’t miss it.

2. Utilize mobile HR for time off requests.

An easy fix for giving employees more power to easily request time off is to give them a mobile app for sending in their requests right when they’re thinking of them. According to Namely’s survey, 76% of all employees would use a mobile app to access a company’s HR tools like time off requests—and millennials are 20% more likely to gravitate towards using an app.

Kathryn Goodick, HR Director at SwervePoint, uses the Namely mobile app at her company. “Our employees are thrilled to now be able to submit time off requests from their mobile devices,” she says, “and it gives me and our managers greater visibility into our employees’ plans at any time.”

When employees have the capability right at their fingertips to better manage their vacations, you’re one step closer to helping give them the work-life balance they desire.

3. Manage a flexible time off policy with all-in-one HR technology.

No matter what exact time off policy your culture settles on, it needs to be flexible enough to support everyone at your company. But the reason several companies don’t implement more innovative policies is simple: they’re harder for HR to manage. Docking employee requests against a bank of 10 days per year sure is easier than handling random requests on the fly and totaling them with an unlimited plan.

When you use HR technology to keep all of your employee data in one place, all of that becomes easier. “This is where HR technology becomes about more than performance reviews, and actually about helping employees manage work-life integration,” says Matt Straz. Imagine time off requests filtering into a company calendar so everyone can keep track of who’s in and who’s out. Also, when payroll, performance, and time off are all managed in one place, you instantly see the full picture of how an employee contributes to your org and interacts with his or her team.

Just like innovative software and tech companies need the best tools to create the future of technology, your culture needs the right tools in order to create an innovative culture. Don’t go it alone and instead get the HR tech you need.

4. Fill in the gaps by cultivating a culture that cares about people.

If employees aren’t taking the time off they need to, there might not be an issue with policy. The issue might be a bit greater one—company culture.

Consider how other facets of your culture may influence how your employees feel about work. The 2015 Staples Business Advantage Workplace Index survey found that 52 percent of respondents feel they can’t even get up to take a break in a regular workday. Furthermore, about four out of 10 work on weekends at least once a month.

But managers know their employees need breaks! In the Project: Time Off survey, 80 percent of managers said that using vacation time is important to maintain team energy levels, and 74 percent said it gives employees better attitudes. So if people at your company are overworked and overlooking their time away from the grind, let them know where your culture stands. Whether that’s in daily breaks, organized lunch hours, no-work weekends, or email curfews—fill in the gaps between those vacation days with breaths of fresh air.

Managing time off doesn’t need to be as tedious as a traffic jam. With the right tech in place to empower your performers—and a "people-centric" culture founded on trust—you’ll be surprised how easy it is to get your whole company cruising down a productive, well-balanced road.

About the AuthorBen Mueller is a Content Writer at Namely, the all-in-one HR, payroll, and benefits platform built for today's employees.

NCHRA 2016 Platinum SponsorNamely believes everyone deserves a great workplace—supported by easy-to-use HR technology. That’s why Namely is the HR, Payroll, and Benefits platform your employees will love. Namely allows you to manage all of your HR data in one place, with personalized service to help your company get better, faster. We're here to give mid-sized companies the software and support they need to evolve their company cultures, engage their employees, and always deliver great HR.

We thought we'd share the following article written by Erin Daruszka • March 10, 2016 for the Namely Blog. Erin did a fantastic job covering HR West - at the Oakland Convention Center. An HR West 2016 Platinum Sponsor, Namely is the HR, Payroll, and Benefits platform employees love. It's HR software that employees actually use—built to fit every company culture. Manage all of your HR data in one place, with personalized service to help your company get better, faster. Namely is used by some of the world’s most innovative and exciting companies in media, technology, commerce, and more.

The HR West conference (2016), presented by the Northern California HR Association, was held March 7-9 in Oakland, CA. As an SPHR, this was my fifth HR West. I consider this conference an academic Disneyland for HR professionals. Of course, there’s the recertification credits that draw us away from the office in the first place. But HR West is always an excellent opportunity to network and share ideas with other HR professionals, reunite with former colleagues, recruit for new talent, and peruse vendors that support the employee lifecycle.

Without further ado, here are some of my favorite moments from three days of great people and great strategies.

You don’t need a crystal ball to predict that workplace issues will generate a lot of buzz this year—President Obama made as much clear in his last State of the Union address. With lawmakers focusing on equal pay, paid family leave, and more at the federal and state level, it’s a sure bet that 2016 will see a wave of changes in the world of compliance. Here’s our HR legislation forecast:

1. States and municipalities, not Congress, will look to close the gender pay gap.

While Congress failed to pass the Paycheck Fairness Act last fall, the prospects for gender pay equality have never been stronger. President Obama's proposed EEO-1 rules could go a long way, but it's legislation at the state level that will make the biggest impact.

2. Several states will act on paid leave, which will feature heavily in the presidential race.

In an election where the environment, economy, and terrorism were expected to be the focus, paid leave has taken much of the spotlight. Candidates from both parties have put forth paid family leave proposals, some more far-reaching than others. There are only three states (New Jersey, California, and Rhode Island) with paid family and medical leave laws, but national attention could prod lawmakers to act. Earlier this month, New York Governor Andrew Cuomo asked his state’s legislature to make it priority and the District of Columbia is expected to pass one of the country’s most ambitious family leave laws this year.

3. ACA requirements will become very real for employers.

Ready or not, here it comes: welcome to year one of ACA reporting. Employers have had two years, with a few welcome delays, to prepare. Knowing this, the IRS and Department of Labor may not monitor with the leniency some are hoping for. DOL auditing alone has reportedly gone up 300 percent year-over-year.

Hoping for an eleventh-hour reprieve? With the Supreme Court yet again turning down appeals to review the Affordable Care Act, the law looks safe for at least this year.

4. The Cadillac Tax will come one step closer to the scrapyard.

Things aren’t looking pretty for the so-called Cadillac Tax. With every major presidential candidate and90 Senators and 290 House representatives openly against the tax, its delay last month likely served as a preview of things to come. Facing pressure from Republicans and even his own party, President Obama could relent in exchange for concessions on other initiatives, like paid leave.

Those are just some the year’s top stories that we’re keeping tabs on in our new HR newsroom. With workplace issues on the forefront of voters’ minds, some could feature heavily in this year’s presidential race. As for that other big 2016 prediction?

Reply hazy, try again.

About the Author

Andy Przystanski is HR Content Specialist at Namely, the all-in-one HR, payroll, and benefits platform built for today's employees. Connect with Andy and the Namely team on Twitter, Facebook, and LinkedIn.